Effectuation Leadership – transform uncertainty into opportunity
When we look back in ten years on predict the future, I can control it.”
is the inverse of this.
dispassionate observer and not that of an anxious Focus on EFFEctuation
participant. We will see the upsides as well as the Using effectual reasoning, you start with only a
set of means; in the process of deploying them,
One of the upsides of the corporate goals gradually emerge.
destruction will be the development of business
Ef f e c t u a t i o n e v o k e s c re a t i v e a n d
models in business schools based on effectuation
transformative tactics. Effectual logic is the name
and not causation
. These models will help given to heuristics used by expert entrepreneurs
entrepreneurial leaders compete in a global and in new ventures. Effectual thinkers believe that
“If I can control the future, I do not need to
Causation underpins the thinking of the predict it.”
business analyst. Effectuation underpins the
Effectuation consists of a unique worldview
Just pause for a moment and consider who is
most likely to miss the turn off for the future, EFFEctuation PrinciPlEs in crEating
business analysts or entrepreneurs? Exactly. Read Your own FuturE
Bird in Hand Principle:
Start with your means.
Focus on causation
Don’t wait for the perfect opportunity. Start
Most business schools are currently structured taking action, based on what you have readily
around imparting five core integrated subject available: who you are, what you know, and
areas to aspiring business leaders: (a) leadership whom you know.
skills that capitalize on knowledge of (b) strategy,
(c) finance and (d) information technology Affordable Loss Principle:
Set affordable loss.
within the context of and influenced by a (e) Evaluate opportunities based on whether the
global economy. So the logic goes like this. To downside is acceptable, rather than on the
understand the financial drivers of a business, attractiveness of the predicted upside.
Effectuation is not new. It has a long and
one must have a command of basic accounting
illustrious history that has brought us an endless
principles; to craft a business strategy, one must Lemonade Principle:
If you are dealt lemons, list of great products that includes WD40, Post-
understand market dynamics; to meet market make lemonade! Embrace surprises that arise it notes, texting on mobile phones, penicillin,
imperatives for high quality at low cost with from uncertain situations, remaining flexible Viagra, Facebook, and the internet. It just now
minimal delay, ICT competency is crucial; rather than tethered to existing goals.
has a name and a teachable element and business
to exercise leadership, one must be aware of
schools are taking it seriously enough to include
global, cultural influences and personal traits. Crazy-Quilt Principle:
Form partnerships. it in the repertoire of leadership skills.
Implicit in the teaching is the emphasis on Form partnerships with people and organisations
. Causal reasoning focus is on willing to make a real commitment to jointly thinking in many of its programmes as it
achieving a desired goal through a specific set of creating the future – product, firm, market – supports leaders to explore new markets, develop
given means. Causation invokes search and select with you. Effectuators don’t worry so much new ways of doing business and create their own
tactics and under-lies most “good” management about competitive analyses and strategic future in a portfolio of MSc courses and business
theories. Causal thinkers believe that: “If I can planning.
development initiatives such as ConnectUS.
“One of the upsides of the corporate destruction will be the development of business models in business schools based on effectuation
and not causation.”
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January 2012 105
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Timothy M. Uyeki,* Yu-Hoi Chong,† Jacqueline M. Katz,* Wilina Lim,† Yuk-Yin Ho,† Sophia S. Wang,* Thomas H.F. Tsang,* Winnie Wan-Yee Au,† Shuk-Chi Chan,† Thomas Rowe,* Jean Hu-Primmer,* Jensa C. Bell,* William W. Thompson,* Carolyn Buxton Bridges,* Nancy J. Cox,* Kwok-Hang Mak,† and Keiji Fukuda* In April 1999, isolation of avian influenza A (H9N2) viruses from humans wa